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Goodbye Booking.com! Hello LockChain!

by Anujit Kumar Mukhopadhyay
by Anujit Kumar Mukhopadhyay

Booking.com or Airbnb.com currently charge an average 20% of each booking as commission, when a traveler books a hotel using these marketplaces. LockChain.co will soon change that with their 0%-commission travel marketplace, aided by blockchain technology.

If you're a traveler, you may not have noticed the elephant in the room. However, if you run a hotel or a vacation rental property, you know what I'm talking about, i.e. the commission charged by travel marketplaces like Booking.com or Airbnb.com from your revenue. When a traveler books a hotel using these marketplaces, an average 20% of the hotel's revenue goes as commission. It can be as high as 50% for some established travel marketplace. The marketplaces don't add value to the actual travel experience, hospitality is provided by the hotel or the vacation-rental property management. The travel marketplaces are “middlemen” here, and there is a significant opportunity to transform this scenario, if the traveler and the hotel can directly transact in a secured manner, with sufficient choices provided to the traveler. Sofia, Bulgaria-based LockChain.co, with their blockchain-powered 0%-commission travel marketplace, and their cryptocurrency LOC, is attempting exactly that.

by Anujit Kumar Mukhopadhyay
by Anujit Kumar Mukhopadhyay

How can blockchain help LockChain in removing the middlemen in the travel marketplace? Well, blockchain makes middlemen redundant by design. In this technology, a network of computers maintain a shared, mathematically proven and immutable record of data, with complete audit trail of all transactions. Every node, i.e. computer on the blockchain has the entire information of the blockchain. This is why every node is considered a ledger, and blockchain is also called distributed ledger technology (DLT). It's a distributed database maintained by all nodes, with no central point of authority, i.e. an update of blockchain is not routed through any central coordinating node, and every node has the exact same authority.

by Anujit Kumar Mukhopadhyay
by Anujit Kumar Mukhopadhyay

Now that we have seen how LockChain plans to make the middlemen redundant, we are left with the important question of security. After all, Booking.com or Airbnb.com are established marketplaces, and you have reasonable assurance that your transactions on those platforms are secured. How will LockChain secure your transaction? The answer is blockchain, again! Blockchain maintains immutable record, i.e. no existing block can be deleted or updated. The only way to update a blockchain is to add a new block record, which is easier said than done! You have heard of the Bitcoin “Miners” already, haven't you? Well, “Mining” is the process through which new blocks are added to blockchain. A “Miner” is a combination of specially designed hardware, special purpose software and their user. To add a new block, a miner has to solve a cryptographic puzzle, essentially a massive number-crunching operation done at high speed, to provide proof of work (POW) for the last recorded block on the blockchain. All of these take place in a highly competitive environment, where other miners are also trying to solve the puzzle fast, and create the new block, because miners get reward for adding new block. Only when this mathematically proven evidence of massive number-crunching work has been provided, a new block can be added. This process makes hacking a blockchain economically non-viable, hence blockchain is very secured.

How does LockChain's marketplace work?

Broadly speaking, the alpha version of LockChain's marketplace has two components:

  1. User interface (UI);
  2. LOC ledger, i.e. blockchain-powered booking engine.

The mobile-responsive UI has the following features:

  • Personal cryptocurrency wallet for Ethereum (ETH)/LOC cryptocurrencies;
  • Real-time support for multiple currencies;
  • Dynamic search function for properties, with availability and price information;
  • Real-time conversation calculation for LOC with respect to other cryptocurrencies and fiat money, i.e. currencies controlled by the central banks;
  • Dashboard for travelers and hosts;
  • Ability for the hotel to initiate communication with traveler upon receipt of booking request.

LOC Ledger is the booking engine that hold information about properties, availability, price etc, and works only on LOC cryptocurrency. Travelers may have less experience with cryptocurrency, hence the UI allows them to transact with fiat currencies, however, the UI connects with LOC ledger which converts them into LOC. The traveler can also transact using Bitcoin and Ethereum, and LOC ledger will again convert them into LOC. Smart contracts within LOC ledger govern the transactions and relationships between the traveler and the hotel, thus providing a real balance of power and providing a fair deal to both.

LockChain is also working on mobile app to make it easier for the travelers, and the app will be available on Android and iOS platforms.

The company was founded by Nikola Alexandrov and Hristo Tenchev. LockChain.co had their Initial Coin Offering (ICO) for their cryptocurrency LOC in November 2017, and they have raised US $ 10.8 million from that. They are confident that they will operate with a high efficiency that blockchain technology offers, and they do not need to take commission from the revenue earned by the hotels. They will charge the hotels a fixed monthly fee, and will provide additional services for extra price. They have planned to protect their clients from price volatility of LOC, and have made adequate arrangements with multiple cryptocurrency exchanges to ensure liquidity and accessibility of LOC. At the time of the alpha launch of their marketplace, they had 600 properties listed, and they expect to list 100,000 properties by the end of February 2018.

This article was originally published on @anujit4blockchain